Understanding Shipping and Packaging During Manufacturing Drives Sales

[A lot of Indian startups and small businesses are on a global expansion spree and this article is focused on those who need global warehouse network to accelerate the same. The article is contributed by Nate Gilmore, Vice President at Shipwire, a business product fulfillment company].

One of the hottest trends in e-commerce today is the emergence of the small, “niche” manufacturer. Anyone who has been reading about Alibaba, for instance, knows it’s easier than ever for small businesses to outsource the design and manufacturing of their own product. And, as a company that provides outsourced storage and fulfillment for SMBs, Shipwire has certainly seen a huge increase in usage by niche product sellers.

What I’d like to discuss here are ways in which product manufacturers can maximize sales and also prepare for eventual growth by giving more thought to shipping during the product design process. Specifically the “Ship-ability” of their products.

Learn how product packaging can:

· Increase the likelihood of them arriving to your customer on-time and un-damaged?

· Reduce your retail costs and increase your conversions

· Give you sales channel flexibility, especially for early-stage product entrepreneurs.

Determine the “Ship-Ability” of your product.

As you manufacture and start thinking about packaging, the first thing to consider is how you actually plan to sell your product.

· Traditional in-store retail or wholesale

· Retail online direct

· Retail online through drop-shippers

· Wholesale online to retailers or wholesalers

Assuming that you’re going to sell your product online or through distributors that will sell online, you must consider variables such as size, weight and packaging of the individual shippable unit. Additionally, if you are going to sell minimum order volumes to wholesalers you should look at your wholesale packaging as a shippable unit and also look at its size, weight and packaging for shipment. Do this because, if you are selling to consumers online, you’ll have to work within the size and weight requirements of the carriers (e.g. FedEx, UPS or the US Postal Service.)

Product shipping dimensional weight is a calculation done by the carriers to determine if your product should be charged more based on its weight or size. General rule is that you can’t ship anything over 150 lbs without going freight and it needs to be able to be moved by a human without a pallet jack. If you have big and heavy products; but, don’t want to ship freight every time then you need to get creative. Can you break your product up into multiple components?

Things get a little trickier if you opt for selling in larger quantities wholesale or to consignment retailers. At this point, there are additional factors you’ll have to look at such as freight, container, and LTL (“Less-than-truck-load” shipping).

One of the biggest questions when dealing with container shipments is whether you can floor stack or you need to put your products on pallets. You don’t sell pallets and they take up container room, so floor stacking can mean more product in a container. That is good. Think about your downstream supply chain before you decide this. If you need to split your full container into multiple LTL shipments after you clear customs your freight forwarder may ask you to palletize. Also, while Shipwire doesn’t charge receiving fees, many warehouses will charge different receiving fees if you have a floor stacked container due to the cost to unload.

Preparing to scale

The other day I read a story at Inc.com regarding a niche manufacturer who was sourcing product from China. Noting how his shipping needs had changed, he stated, “At the beginning, it was expensive, but really simple, to ship things back and forth. You just get a FedEx account and two days later you have samples in your hands. Now that we’re up to shipping a larger bulk, we’re working with a third-party freight forwarding company, which is trickier, but less expensive.”

Based on my experience, this entrepreneur’s experience is pretty common. Once you’re moving larger quantities of product, shipping gets a more complicated. Whether you work with a third party logistics company or not, there are a few things you can do to ensure that your product packaging will allow you to scale:

· Understand case packs and master cartons and how they match your minimum wholesale order quantities.

· Packing is almost always cheaper to have customized when you have the product manufactured

· How you label your products for wholesale and retail sales can be as important as your packaging.

· Free shipping offers are here to stay; so understand how your packaging, labeling and product dimensional weight will impact your desire to offer free or included shipping in your retail or wholesale price points.

Do share your opinion/experience on the same.

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